European Commissioner for Trade, Cecilia Malmström, met with Japan’s Economy, Trade and Industry Minister Hiroshigo Seko, and Ambassador Robert E. Lighthizer, United States Trade Representative, in New York on September 25.

They confirmed their shared objective to address non market-oriented policies and practices of third countries that lead to severe overcapacity, create unfair competitive conditions for their workers and businesses, hinder the development and use of innovative technologies, and undermine the proper functioning of international trade, including where existing rules are not effective.

As reported by a Commission press release, the ministers recalled that market-oriented conditions are fundamental to a fair, mutually advantageous global trading system and that their citizens and businesses operate under market-oriented conditions. They discussed actions being taken and possible measures that could be undertaken in the near future.

Accordingly, they directed their staff to further their discussion on various elements or indications that signal that non-market oriented policies and practices exist for businesses and industries. They will enhance information sharing on non-market-oriented policies and practices of third countries, as well as engage with other trading partners on identifying means to maintain market-oriented conditions, and to deepen discussions on enforcement and rule-making as tools to address these problems.

In a joint statement, the three highlighted the importance of securing a level playing field given the challenges posed by third parties developing State Owned Enterprises into national champions and setting them loose in global markets – resulting in distortions that negatively affect farmers, industrial producers, and workers in the Ministers’ home countries.

They also confirmed their commitment to continue working together to maintain the effectiveness of existing WTO disciplines.

On this basis, they agreed to intensify discussions among themselves and expressed their intention to advance their respective internal steps before the end of 2018 with the aim of initiating a negotiation on more effective subsidy rules soon thereafter.

They also recalled their shared view that no country should require or pressure technology transfer from foreign companies to domestic companies, including, for example, through the use of joint venture requirements, foreign equity limitations, administrative review and licensing processes, or other means. The Ministers found such practices to be deplorable.

They will also intensify and accelerate this process to deepen understanding among members on possible elements to be included in a future agreement on digital trade.